New owners of Chevron B.C. refinery to proceed with $100 million 'material turnaround'

As Calgary-based Parkland Fuel Corp. integrates $1.5 billion worth of downstream assets from Chevron—including Chevron's oil refinery at Burnaby, B.C.—the company is integrating plans already in place for a $100 million "material turnaround" next year.

Parkland already owns 44 Chevron branded gas stations in B.C. but will be adding 129 more, most of them in the Lower Mainland. It will also acquire 37 cardlock stations and three marine fueling stations.

Parkland is a Canadian fuel distributor and retailer that operates gas stations and propane delivery across Canada.

“This is our first step into the refining business,” said Spenser Rocky, Parkland’s corporate development officer.

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The company will be able to continue supplying those stations with gasoline and diesel produced at the Chevron refinery in Burnaby, and it plans to keep the Chevron brand.

"Parkland is acquiring a highly integrated business which adds significant supply infrastructure and logistics capability to support Parkland's existing operations,” Parkland CEO Bob Espey said in a news release.

“The refinery in Burnaby is an important asset to Metro Vancouver and British Columbia and we will continue to operate it with the capable and experienced professionals who manage the refinery today.”

The Chevron refinery processes 55,000 barrels of oil per day to produce gasoline, diesel and jet fuel. It gets a little over half of that from the Trans Mountain pipeline, with the rest brought in by rail. The refinery supplies 20 to 25 percent of B.C.'s gasoline and diesel.

It’s still not clear whether the refinery would have access to more oil from Trans Mountain pipeline after the pipeline's proposed expansion. Chevron was not among the 13 shippers to sign up for long-term contracts to move oil on the expanded pipeline, which means it would have to compete for what what’s left over on the spot market.

Rocky said Parkland is confident the expansion would give the refinery more access to pipeline oil.

“In the post expansion world, we’re confident with the options that we have that in one way or another we’ll be able to get the kind of cost effective crude we need,” Rocky said.

Parkland plans to spend $100 million the turnaround, planned for the first quarter of 2018. The refinery is not planned to be shut down for the project, but will have lower output during the eight-week period, according to an investor presentation.

Planning for the turnaround is already well underway and key turnaround personnel will transition with the asset, Parkland say, adding that it will also receive technical assistance from Chevron following the close of its acquisition.